The Best Banks

Banks that benefit you, not the other way around

Latest UpdateNovember 4, 2015

How's your relationship with your bank these days?

If you’re feeling frustrated, finding your basic banking needs continually compromised by new pages of fine print and fees added to your account each year, there’s good news — you no longer have to settle.

When it comes to your bank, it pays to shop around. The Wall Street Journal recently analyzed fee data from over 6,000 banks. They found that at the 25 institutions with the highest average fees, the average account was charged more than $383 each year. They also found 160 banks where the average account was charged less than $5 in fees annually. That’s a difference of $378!

Looking at top recommendations and various consumer needs, I found the ideal combination of growth and value at Ally Bank. As former Barclays and Citigroup executive Nick Clements notes, “Ally is truly leading the way.”

In doing my own shopping around and researching the best banks, I was looking for an institution where my money would not only be safe and secure, but free to exist without threat of dwindling balances courtesy of constant fees. I spoke to financial planners, former bank executives, and personal-finance experts. I sifted through rankings, compared fees and interest rates, and tested accessibility to find the top picks.

How we chose the best banks

Settling on a banking choice largely depends on your needs as a consumer, which is why I’ve identified the best in a variety of categories. In addition to comparing interest rates, fees, services, and accessibility, I spoke to industry leaders who offered their tips to customers looking to ditch nickel-and-diming institutions while maximizing their money in a safe, consumer-friendly banking environment.

Shannon McLay – Former financial advisor at Merrill Lynch and founder of financial-planning company Next-Gen Financial.

Nick Clements – Formerly of Citigroup and Barclaycard, Clements worked in consumer banking for nearly 15 years before founding Magnify Money to help consumers make better financial choices.

Casey Bond – Managing editor at GoBankingRates.com, Bond is also a personal finance contributor at Business Insider, US News & World Report, and The Huffington Post.

Erin Lowry – Content manager at Magnify Money, Lowry is a personal finance contributor at AOL’s Daily Finance, US News & World Report,, and About Money.

The experts prioritize value when choosing the best bank — value being defined as the highest rates of return combined with the lowest fees and account minimums. I compared rates on checking, savings, and CD accounts and contrasted them against various fine-print fees that could potentially eat away at those returns (e.g., ATM fees and account-maintenance fees), looking for the best combinations in each banking category, as well as overall.

At the end of the day, choosing the best bank isn’t about the fanciest lobby or the prettiest mobile interface — it’s about finding the best place to store and grow your money.

Other banks to consider

Best brick-and-mortar bank

Big banks provide convenience with a comprehensive suite of financial products, vast networks of ATMs, and accessibility to brick-and-mortar locations that are hard to beat. Wells Fargo tops the list with the most branch locations (6,535), making in-person access to bankers and tellers available nationwide. Offering everything from basic bank accounts to loans and investment services, Wells Fargo makes consolidation of accounts possible for consumers who prefer to keep all of their financial business in one location. That accessibility and convenience combined with a BauerFinancial rating of 4 out of 5 stars makes Wells Fargo the number-one choice among brick-and-mortar financial institutions.

Best online bank

Where big banks provide the convenience of consolidation and in-person accessibility, online-only banks provide the best value. According to Nick Clements, founder of MagnifyMoney, “Online banks are completely changing the game. Not only can they offer dramatically better value, but they are now offering better customer experiences as well.” With no monthly maintenance fees on checking, no minimum-balance requirements, ATM reimbursements nationwide, a high yield of 0.99 percent APY on savings, and 24/7 online and phone support, Ally Bank provides the ultimate online banking experience. Consistently ranked as number one by financial publications from GOBankingRates and MagnifyMoney to Money Magazine, Ally Bank proves the best online banking option time and time again.

Best bank for mobile banking

Mobile money management is an increasingly popular and necessary tool in any financial arsenal. From sending quick person-to-person payments to depositing checks and paying bills, a user-friendly mobile experience is a must. “Some banks have designed a true mobile experience, whereas other banks have just tried to migrate their website to a mobile phone,” notes Clements. Mastering the true mobile experience is Capital One, ranking highest among consumers with 4.5 stars on iTunes and 4 stars on Google Play. Reliable, user-friendly, and equipped with a unique “sureswipe” feature that allows for easier, gesture-based mobile login and increased billpay security, Capital One dominates the mobile-banking marketplace. Capital One 360’s checking account also comes with no minimums and no monthly fees, making the mobile and banking aspects at Capital One an attractive combination.

Best student bank

College students looking for the best place to open their first bank account can benefit from banking options not available to most consumers. Bank of America’s Core Checking Account has low fees and waives monthly maintenance charges for eligible students under 23. With brick-and-mortar, online, and mobile services, the accessibility can’t be beat. Additionally, the money-management tools that come with every account can be helpful for students looking to build their financial foundation with basic financial literacy. After graduation, however, students face an onslaught of fees and fine print associated with regular Bank of America accounts. Upon reaching that point, grads should reassess their banking needs and reconsider their best option.

Best bank for travel

With no foreign transaction fees and ATM fees reimbursed worldwide, Charles Schwab has the best banking perks for frequent travelers. To open an Investor High Yield Checking account, you must have a linked Schwab One Brokerage account. The brokerage account has no fees or minimums, either.

Best bank for small business

Even small businesses can enjoy free checking and no minimum-balance requirements. Like other online accounts, BBVA Compass ClearConnect for Business comes with free online banking, billpay, mobile banking, mobile deposit, and unlimited digital transactions. In addition to digital transactions, account holders can make 5 in-branch withdrawals and 2 in-branch deposits per month at no additional cost. There is, however, a cash deposit limit of $5,000 per month, and brick-and-mortar branches are only available in seven states.

A full review of the best bank

Ally Bank

I still remember my first banking relationship. After being roped in with a seductive $50 sign-up bonus, things went sour pretty quickly. My so-called “bonus” was entirely negated by fees on everything from paper checks to ATMs. The problems continued as a constant flow of letters announcing “new changes to your account” arrived in my mailbox each quarter, which may as well have been “new charges to your account,” not that I wasn’t already paying a fortune to access my own money.

Just as we demand high expectations from our personal relationships, we should demand high expectations from our banking relationship.In return for our deposits and swipes of debit or credit cards, which all add value to the bank, we should expect at the very minimum convenience and affordability.

Shannon McLayfinancial planner and founder of Next-Gen Financial

I found that ideal combination of value and convenience in online banking — all thanks to freedom from fees and access to higher interest rates. Ally Bank tops the best bank rankings largely thanks to those two factors.

Ally Bank checking

Ally Bank’s checking account ranks among the best, thanks to no monthly maintenance fees, no overdraft transfer service fees, free incoming wires, ATM reimbursements nationwide, and free checks. Customers can enjoy all of these freebies along with a starting APY of 0.10 percent Ally’s non-sufficient funds fee is also one of the lowest at $9 — compared to the national average of $32.74 — ensuring account holders won’t see balances quickly depleted due to overdrafts.

Ally Bank savings

The average savings account rate in the U.S. is currently around 0.17 percent APY. Ally Bank’s online savings account offers a significantly higher 0.99 percent APY along with no monthly maintenance fee and no minimum-deposit requirement, making the savings account one of its top features. The account is also highly accessible — customers can deposit checks using Ally’s eCheck deposit and schedule transfers between both Ally and non-Ally accounts.

Ally Bank CDs

Taking into account all term lengths, the average national CD rate is just 0.51 percent APY. At 1.05 percent APY, the 12-month CD at Ally not only boasts an impressive rate, it beats out many of its competitors, thanks to its no minimum-deposit requirement.

Ally Bank money market accounts

The Ally Money Market Account also ranks among the best because of its combination of high interest rates, perks, and transparency. With no maintenance fees, no minimum deposit, and a competitive rate of 0.85 percent APY, the money market account is also top notch.

Ally Bank mobile banking

Ally’s banking services are mobile-friendly — meaning account balances, transfers, and automatic billpay are all easily accessible from your smartphone and tablet. E-check deposit also allows for the simple addition of funds to your account.

Ally’s Popmoney feature, accessible online and from the mobile platform, allows for easy person-to-person transfers with a valid email address or phone number — no exchanging of bank account information required.

Ally Bank auto financing

Unlike many of its online-banking counterparts, Ally has a comprehensive suite of auto-financing products for individuals and fleets that buy or lease. It also offers a flexible Buyer’s Choice option for individuals who aren’t sure how long they want to keep their cars.

Ally Bank was actually born out of the government bailout of GM following the 2008 financial crisis. Ally initially offered some of the highest interest rates on online savings accounts as a funding strategy for the subprime auto business. Ally’s entire banking structure was created with the financial crisis in mind. Striving to be the opposite of the banks that people came to know during the crisis, Ally worked to eliminate fees, pay fair rates on deposits, and create a better overall experience for account holders.

Ally Bank customer service

Part of that new and better banking experience includes 24/7 customer service. Both online chat and the call center are available at all hours, including holidays, with actual bank employees on the other line. At any given time, you can find the call-in wait time proudly displayed on Ally’s homepage.

Ally Bank security

Unfortunately, online-only banks suffer from a stigma of perceived security risk. That security risk is just that though: perceived. Online banks implement strict measures to keep financial data out of the hands of strangers and are FDIC-insured, offering your funds the same level of protection as any traditional bank. As it is, any bank worth banking with has some kind of online access. Your assets are no more vulnerable online than they are at any major brick and mortar. These days, every bank is an online bank. Even if you choose not to take advantage of online features, your bank no doubts conducts its own transactions across the internet.

Limitations

One of the caveats at Ally is the lack of physical branches. While checks can be deposited using Ally eCheck Deposit (up to $50,000 per day or $250,000 every 30 days), cash deposits are not accepted. Ally is also limited in its product offerings, with fewer services compared to major brick-and-mortar banks — no brokerage, no mortgage department, and minimal services for small businesses. But when it comes to basic, personal banking — checking, savings, CDs, and money-market accounts — top rates of return coupled with minimal fees make Ally an obvious choice.

The runners-up for best bank

Even this comprehensive list of best banks can’t accommodate all the best account options, which is good news. Ample selection means you’re bound to find an account that suits your needs without whatever hassle and fees you were subject to at your old bank. Here are a few more top contenders to consider.

Bank5

An online-only bank with no monthly fees on checking, a 0.90 percent return on savings, and 1.00 percent APY on a one-year CD, Bank5 Connect offers benefits that rival those of Ally. Bank5 Connect also boasts a 5 out of 5 star BauerFinancial Rating. While both the site and the app can connect you to a human representative, customer support is not available 24/7 as it is with Ally.

Discover Bank

With rates on accounts rivaling Ally and Bank5 Connect and a BauerFinancial rating of 4 out of 5 stars, Discover is another bank that offers exceptional value. Discover also offers call-in customer service 24/7, along with a variety of services that can be difficult to find at other online-only banks, like credit cards, mortgages, and personal loans.

Choosing the best bank for you

Your best bank option will inevitably be dictated by your specific needs. If you need frequent access to cash, choose a bank like Ally that reimburses ATM fees. If you travel worldwide with any frequency, use a bank like Charles Schwab that doesn’t charge foreign-exchange fees. If you value the in-person customer experience, look into your local bank and credit union options. With so many features of the banking experience to consider, ranking perks and features in order of importance can help identify what to prioritize in your search for the best bank.

Consider all of the following factors and their relative importance to you:

Keep in mind that your banking experience doesn’t have to exist with just one bank. You can cherry-pick the best features of each bank — such as best checking account, best savings account, best CD rates, and best loan rates to create your perfect banking hybrid.

Opening accounts at different institutions can also better protect your nest egg. FDIC and NCUA insurance only cover up to $250,000 in assets per depositor, per institution — not per account. Having accounts at multiple banks can not only ensure that you get the best rates for each service, it can also keep your assets protected in full without any under-the-mattress shenanigans.

Choosing brick and mortar banking

If you’re dead set on having an in-person banking experience and access to the full suite of financial services in one place — checking, savings, CDs, credit cards, mortgage, auto loans, investments, and insurance — brick-and-mortar banking may be your best bet, with Wells Fargo leading the way. The price to pay for that convenience is low rates of return on checking and savings, high minimum account balances, and fine print riddled with fees. (Real estate and human capital ain’t free, you know.)

Choosing regional or community bank banking

Smaller regional and community banks offer an alternative to big brick-and-mortar banks with fewer fees on basic accounts, greater lending flexibility, and, oftentimes, superior small-town service. A more personalized approach at these smaller institutions means the chance to develop a relationship, which can help in certain situations, like qualifying for a loan in spite of a less-than-perfect credit history.

Unfortunately, these smaller banks also come with fewer overall product offerings and a limited reach, meaning you could end up paying a fortune in ATM fees every time you try to access your money elsewhere. Having a relationship with a local bank while also having some funds in a place like Charles Schwab (which reimburses even international ATM fees) could provide you the best of both worlds.

Choosing a credit union

Credit unions provide another banking alternative for consumers looking to maintain the in-person experience without the major brick-and-mortar banking caveats. As not-for-profit institutions, credit unions offer higher interest rates on savings vehicles and lower interest rates on loan products and credit cards. Unfortunately, they typically don’t have a ton of options for each account or financial product. And while they usually offer an intimate in-person experience, credit unions struggle with accessibility beyond their doors with fewer branches, ATMs, and lagging online and mobile technology.

Choosing online-only banking

A September study from GOBankingRates found that online savings accounts offered interest rates nearly seven times higher than brick-and-mortar banks and four times higher than credit unions. When it comes down to the reality of the numbers, it’s hard to argue against the clear benefits of online-only banking. While they may not offer in-person service, online and mobile accessibility paired with around-the-clock support at top picks like Ally make online-only banking a top option for anyone.

What makes a good bank?

According to personal finance pro and editor at GOBankingRates.com, Casey Bond, there are three major characteristics to consider when choosing the best bank: interest rates, fees, and customer service.

Deposit rates have been incredibly low for the last several years, which means it's important to find a bank that offers rates high enough to help you keep pace with inflation and avoid losing value on your short-term savings.

Casey BondGOBankingRates.com edtor and personal-finance expert

Interest rates

Ally Bank and its online-only counterparts are able to offer rates of return four-to-seven times higher than traditional and local banking institutions because they don’t have to contend with the major costs associated with brick-and-mortar locations (like rent, utilities, and teller salaries). Instead, they pass those savings along to their customers in the form of higher rates.

Fees

Bond also notes that the banks that consistently pay higher rates also tend to offer other attractive perks to customers (like minimal fees). Once again, because of their relatively minimal operating costs, online banks are able to pass along savings to customers in the form of fewer fees.

Customer Service

As for customer service, that can be assessed in any number of ways — accessibility, service, transparency, and more. The components of customer service of highest value to you (for example, mobile experience versus call-in wait time, in-person accessibility, and personal relationships) — should be weighed in appropriate measure when determining your best banking match.

Security

Lastly and most importantly, security is paramount. In all of these best bank options, it is a given. With the top banks FDIC insured and credit unions insured by the NCUA, all deposits are insured up to the maximum amount. Whether you choose to go mobile or keep it face to face, FDIC and NCUA insurance keeps your money protected, regardless.

Final Thoughts

With a new brick-and-mortar bank popping up on seemingly every corner, luring customers in with promotional tables advertising enticing sign-up deals, it can be difficult to objectively assess your best banking option. After all, $50 bucks for opening a checking account sounds like a pretty sweet return on investment. But let my naiveté be a lesson. Fifty dollars is nothing when the bank is charging you $3 just to get your own money out of an ATM, and $12 a month just to keep your account open.

Demand more from your bank. Make sure they’re paying you, not the other way around. Better options are out there, especially now with online-only banking. Get the best of the best with Ally Bank — high rates, low fees, and 24/7 quality customer support.

Have you gotten stuck in a bad banking relationship paying incessant fees and seeing little return on your balances? Have you found relief in traditional banking alternatives like online only banks? What part of your banking experience do you deem most valuable? Let us know in the comments!

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